Hindenburg row: Senior lawyer Jethmalani points to 'China link' in Hindenburg's attack on Adani Group

According to reports, the Securities and Exchange Board of India (SEBI) earlier this week had said that foreign portfolio investor Kingdon Capital Management LLC and its entities aided Hindenburg in indirectly participating in Adani Enterprises Ltd.

A probe by the markets regulator also exposed that Kotak Mahindra and Hindenburg conspired together to take short positions in Adani shares, as per reports.

Mahesh Jethmalani, in a lengthy post on X (formerly Twitter), said Mark Kingdon, the American businessman behind Kingdon Capital Management LLC, had hired Hindenburg to prepare a report on the Adani Group, and the businessman also approached Kotak's international investment arm Kotak Mahindra Investments Limited (KMIL) to set up an offshore fund as well as offshore accounts to trade in Adani shares, which led to the creation of the Kotak India Opportunity Fund (KIOF).

The KIOF allegedly took short positions in shares of Adani Group Companies through the Mauritius route before the Hindenburg report was made public and nearly $40 million for this was given by the Kingdon Master Fund, as per reports.

The smoking gun referred to by Jethmalani in his revelation that Kingdon's wife Anla Cheng, a Chinese-American who has a large shareholding in the Kingdon Master Fund, is a lobbyist for Chinese interests in the US.

"She was the CEO of #SupChina a pro-China media corporate initiative which morphed into an entity called The China Project after a whistleblower accused SupChina of news subversion in China's interest in a sworn statement before the US Congress," the senior lawyer wrote on X.

"#TheChinaProject shut down after calls for an investigation into its subversive activities by some US senators including having links with the Chinese Communist Party. The latter clearly has a bone to pick with the Adani group," Jethmalani added.

Mahesh Jethmalani suggested that the actions of Anla Cheng and her husband Kingdon were prompted by the Adani Group thwarting Chinese interests in several parts of the world, including outbidding Chinese players for the Haifa Port in Israel and for coal projects near Sri Lanka's Jaffna.

"Who introduced the Kingdons to KMIL, what due diligence was conducted by KMIL regarding the Kingdons and did it participate in the short sell as a principal," Jethmalani asked.

Here, another question arises -- whether all the Indian people, organisations and entities who helped Hindenburg knew about the short-selling plan and whether they benefited from it?

Lawyer Jethmalani specifically mentioned politicians, in an apparent dig at the opposition, which has used the Adani-Hindenburg issue to target the group and the government on several occasions.

Jethmalani also asked whether these people and entities knew about the Chinese link.